Several critical
elements worked together in Agrawal's favor as he
began his quest to get the fledgling company off the
ground. During 1978, Agrawal's firm went through a
reorganization that involved a transformation from
consulting to manufacturing and fabricating business.
The company had booked enough substantial work to
allow Agrawal to bring in key people on a full-time
basis. As a result, PT&P had a new sense of
direction and the people to enable the firm to compete
in the market place. In addition, the timing and the
location for this venture--in the midst of the 1970s
oil boom in Houston, Texas-- could not have been
better. In order to understand the significance of
PT&P's success and survival and to place the story
of the company in its proper historical setting, it is
useful first to examine briefly the backdrop for the
endeavor, the economic climate of post-war Houston.
During the years
immediately before World War II, Houston's oil, gas,
and petrochemical industries began to thrive. By the
end of the war, these industries expanded to such an
extent that the city became known as the "energy
capital of the world." Because of its close ties
to the oil industry, Houston was able to avoid the
severe economic downturns that plagued other regions
of the country during the post-war years. The
phenomenon was due to the counter-cyclical upswings
that the oil or energy-based sector experienced just
as other areas of the economy went into their slumps.
One of the best examples of this occurred during the
early 1970s. Just as the national economy began to
experience a major recession, the Arab oil embargo in
1973 brought a huge increase in oil prices that gave
Houston's economy an immediate boost. Crude oil prices
shot up--quadrupling in just 90 days. With the price
of oil closing in on $38 a barrel, the search for
oil-- which had become prohibitively expensive due to
low oil prices--became economically feasible once
again. The increase in oil prices stimulated an
increase in oil exploration and drilling. The domestic
oil rig count -- a barometer of oil field exploration
activity--rose from around 1,000 active rigs to 1,472
in 1974, 1,660 in 1975 and over 2,000 in 1977. When
oil prices increased again in 1979, the rig count
jumped again climbing to 4,250 by the end of 1981.
Although the rising oil prices deepened the national
recession, the initial impact proved beneficial to
Houston-based manufacturers. The firms that produced
oil field equipment and supplies along with those who
provided oil field services and energy technology saw
a huge leap in revenues. The ripple effects of the new
energy boom quickly spread throughout the Houston
economy. Among the beneficiaries of the boom were
those companies that provided products like pipe
supports, pipe hangars, and expansion joints for the
downstream sector of the energy industry--oil
refineries and petrochemical factories-- including
Piping Technology & Products.
During Houston's
fabled economic boom of the 1970s and early 1980s, the
city experienced tremendous growth in population, employment,
and income. In 1981 the population grew 7.2 percent,
employment rose 8.4 percent, including 167,000 new
jobs in oil field equipment manufacturing, and personnel
income shot up an incredible 19.9 percent. Since all
these occurred during the time of a sagging national
economy, it appeared certain that Houston was
experiencing yet another of the city's historical
counter-cyclical booms. Oil prices continued to rise
and many experts confidently spoke of benchmark
surpassing $50 per barrel. All of this led city
officials and business leaders to believe that the
prosperity would continue into the foreseeable future,
bringing economic growth and expansion during the rest
of the decade.
